Freshpet (FRPT) Q2 2025 earnings summary

Executive summary

• Net sales for Q2 2025 rose 12.5% year-over-year to $264.7 million, driven by volume growth and retail expansion, with digital sales up 40% and Freshpet Fridge installations reaching 29,141 locations.

• Adjusted gross margin improved to 46.9% from 45.9% year-over-year, reflecting operational efficiencies and lower input costs.

• Adjusted EBITDA increased 26% to $44.4 million (16.8% of net sales), with net income of $16.4 million, reversing a $1.7 million loss last year.

• Operational improvements and new technologies enabled at least $100 million in CapEx reductions for 2025–2026, supporting improved profitability and capital efficiency.

• Market share in the gently cooked fresh frozen branded dog food segment is 95%, but only 3.6% in the broader $37 billion U.S. dog food segment.

Financial highlights

• Q2 net sales: $264.7 million (+12.5% YoY); volume contributed 10.8% growth, price/mix 1.7%.

• Adjusted gross margin: 46.9% (up 100 bps YoY); adjusted EBITDA: $44.4 million (16.8% margin); net income: $16.4 million.

• Operating cash flow for Q2: $33.9 million; cash on hand at quarter-end: $243.7 million.

• Capital spending for Q2: $33.4 million; YTD capital spending: $59.9 million.

• SG&A as % of sales: 34.1% (down from 40.7%); adjusted SG&A: 30.1%.

Outlook and guidance

• FY25 net sales growth now expected at 13%–16% (down from 15%–18%); adjusted EBITDA guidance unchanged at $190–$210 million.

• CapEx for 2025 projected at ~$175 million (down from $225 million prior guidance); further reductions expected in 2026.

• 2027 net sales and household targets removed due to slower category growth; margin targets of 48% adjusted gross and 22% adjusted EBITDA margin for 2027 reaffirmed.

• Confident in achieving free cash flow positivity in 2026.

• Liquidity position sufficient to fund operations and growth strategy for at least the next twelve months.